Analysis

Indie labels talk tech: startups, bots, virtual reality and more


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Messaging bots, virtual reality and other whizzy new technologies have potential for the music industry, but how will that play out for independent labels and artists, who rarely have large R&D budgets?

That was the key question in the closing panel at AIM’s Music Connected conference in London yesterday, moderated by Music Ally’s Stuart Dredge.

Among the topics: an alleged paucity of invention currently happening in music technology; where the industry still needs to play catch up with what’s out there; why VR may only going to work for the top 1% of acts when bankrolled by major brands; and where bots can start to take the pressure off music marketing departments.

The session opened with Mark Mulligan of MIDiA Research puncturing the hype bubble around music and technology in 2017, saying that true inventions are thin on the ground in 2017.

In the past 20 years, there hasn’t been as little happening in the innovation front – or perhaps more accurately the invention front – than there is now,” he proposed. “There’s a difference between invention and innovation. Invention is making something new; innovation is making something better. Most of what is happening at the moment is technically innovation.”

He added, “Look at it compared to the late 1990s, where there was Napster and MP3.com, or the early 2000s, when there was the iPod and iTunes – and then later on we had Last.fm and Pandora […] It felt they were completely changing things. Now when you look around, there is a lot of cool stuff, but you have to ask how much of it is changing the world. Maybe we don’t need it to be changing the world. Maybe it was all to get us to this point.”

For Mulligan, only Musical.ly and Dubsmash stood out as genuinely inventive things impacting on music at the moment. The rest, he felt, was refining what is already out there – and that’s mostly around streaming.

Streaming now is driving some of the best years that people have seen and the future looks rosy; but essentially it’s just one big thing that everybody is trying to work out there and it dictates all of our lives now,” he said. “It generates so much revenue and it’s a way to break artists.”

Claire Mas of Communion Music felt that this lack of invention was a good thing as it was giving the industry much-needed breathing space to catch up with and properly maximise the technology that is already out there – rather than huffing and puffing after the latest tech hype.

We have hardly even gotten to grips with the new technologies and platforms: I don’t think we need more technology,” she proposed. “We need to play catch up [with what we have] as we are not really efficient on all the platforms we have for the past five or 10 years. I am quite happy that there isn’t too much new stuff. It’s great to look forward, but it’s also great for us to kill it on the technology we have available. Just getting these basic things right would be a start.”

Nikoo Sadr of The Orchard agreed. “A free tool for everyone to use now like Spotify for Artists. Everyone thinks ‘that’s not new, that’s been around for a while’. But I’m still really surprised that whenever I speak to managers or labels that they’re not aware or they haven’t got it,” she said. “Actually, there’s a lot of stuff out there that we’re not taking advantage of or doing right.”

Simon Wheeler of Beggars Group said part of his job was judiciously filtering the many new technology companies coming to his (and other labels’) door, claiming to have the solution to all of their problems. Most, he felt, were doomed form the off and it was tricky sorting the wheat from the chaff.

If I had a pound for every business that came in and said they were going to make us a load of money, I’d have a lot of pounds. Unfortunately, I don’t have any pounds as most of them don’t make any money,” he joked. “How do you filter these things? If I knew that, I’d be a VC that invested in the companies that make loads of money and be retired by now. You just have to go on your gut instinct. Often it sounds great but, frankly, I can’t see it. That’s about the best you can do.”

Dredge asked Wheeler, “So you don’t have Musical.ly coming in saying they’d love to work with Radiohead and asking what they can do?” Wheeler immediately responded: “I’ve had that conversation!”

Wheeler added that some new companies come to music labels with unrealistic demands, especially wanting to work directly with acts in order to show proof of concept.

“To try something out, it has to fit in with the campaign you are actually running,” he said. “A lot of companies come to us and say, ‘You have a load of artists. Surely we can just take one of those and do something with it?’ Well, you can – but nobody is going to learn anything even if we did manage to do it. You still have to resource it. We don’t have magical pixies who run around making all this shit happen. Somebody has to do it. It has got to be part of a campaign as at that point you can fit it in with the messaging and the marketing. You can’t just do this in isolation as you won’t know if it works.”

Grant Heinrich of The Bot Platform said that inventive things were happening in technology – but they are often outside of music and they were priced in a way as to be totally inaccessible for most music companies, especially indie labels.

“What’s going on outside of music – there’s actually a hell of a lot of really interesting marketing innovations going on,” he said. “Sets of systems that understand a fan comes to the website and it can send them this on one day and that on another day. None of this stuff is affordable for the music industry. Some of these systems cost £2,500 a month. It’s just not affordable for small labels.”

Other technologies from outside our industry are more affordable, though. “There’s a lot of innovation outside the music industry which have tools that we can use for the music industry, especially with video becoming more important: loads of video-editing programs that you could be using,” said Sadr. “It won’t transform your campaign, but it will bring you to the next level.”

The jury (well, the panel) was very definitely out on virtual reality – or, more specifically, VR in 2017. The feeling was it was interesting and creative – but perhaps too early. Plus, it is prohibitively expensive to do right.

Mulligan talked about the hype cycle and how new products come along, are immediately hailed as saviours for their sector but most quickly go to the wall. He predicted that several VR companies would crash and burn this year and that was in part that hardware is currently soaking up 15 times more of the money here than content is.

In a few years’ time, for the VR companies still standing, that is when things could really start to happen. “We are in this middle bit with VR,” he said, while pointing to companies like HTC and Samsung’s willingness to invest in VR content – budgets that music companies and artists could take advantage of.

Wheeler said that what the industry as a whole is still not convinced abut VR’s role in the near future, it is the cost that spooks him most.

“It reminds me the very early days of the internet when if you were talking to managers about downloads the shutters would come down and they’d be off taking about doing some print advertising,” he said. “That’s the first to grasp. The second thing with VR is it’s really bloody expensive. We have done a couple of pieces and the only way we could really create something in VR or even 360 is by having someone else pay for it. It’s a ludicrous sum of money that we’re never, ever going to pay for a video.”

Wheeler argued that you need brands to bankroll an experiments in VR – but with videos costing upwards of £500,000 to make, it is only the top 1% of acts that have an audience draw potentially big enough to justify the expenditure.

“How much value is that going to be for your campaign?” he asked. “How many people are actually going to see it? The answer is really not very many.”

Finally, on chatbots, Heinrich was brimming with confidence. He felt that they can start to lighten the load for marketers by automating a lot of what they are doing in terms of trying to convince floating voter consumers to engage with a new act.

“You are gradually persuading [the fans] that they should be getting more and more engaged with the artist,” he said. “The point of [bots] is that you don’t have to do all the work. You set up this conversational trail and look at it as a customer ladder – to take a person form being neutral and convince them the artist is interesting. I am very mercenary about this, but I look at it as an upselling tool.”

He left the audience with a brazen money-saving tip when costing up work with normally expensive social marketing companies.

“It’s worth pointing out that if you go to any of these social marketing companies and tell them you are a startup, rather than a record label, they usually have somewhere between 60% and 80% discount,” he revealed. “It’s almost worth starting another company to do that! I only realised this when I left music to go into the tech world…”

Eamonn Forde

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